FCA cracks down on Woodford and DB pensions: the week in news

As the race to No 10. continues the financial regulator too has had its hands full this week, launching an investigation into the suspension of Neil Woodford’s Equity Income fund and warning advice in the defined benefit transfer market was still subpar.

But intervention from MPs and the regulator over the past two weeks accumulated on Tuesday (June 18) when Andrew Bailey confirmed the FCA had opened an investigation into the debacle and at the same time revealed it had increased its supervision of the fund as early as February last year.

This was after the fund had breached the 10 per cent limit on the maximum proportion of unlisted securities it is allowed to hold on two occasions in February and March 2018.

Publishing the results of its survey of 3,015 firms on Wednesday (June 19) the FCA also voiced concern about the volumes of recommendations, with 69 per cent of individuals having been recommended to transfer. This was despite the regulator's stance that transfers are unlikely to be suitable for most clients.

Earlier this year the FCA took steps to make it easier for advisers to switch platforms, stating in its interim platform study it was keen for advisers to do so if in the best interests of the client.

In particular the regulator wants the platform from which the client is switching to create a new share class to match the share classes available on the platform that is receiving the client's assets.